The finance ministry is not willing to give up its proposal of imposing minimum alternate tax (MAT) on SEZ units. While the commerce department has argued such a tax would go against the promise of a five-year 100% tax exemption made to investors in the SEZ Act, the finance ministry is not convinced.
The empowered group of ministers (EGoM) on SEZs, which could not take a decision on the issue at its meeting last month, will take up the issue again in its next meeting.
Speaking to ET, commerce department officials said the finance ministry was adamant about imposition of a 12.5% MAT on all SEZ units despite the fact that it would require an amendment to the SEZ Act. "In the last meeting of the EGoM, the matter was debated extensively by all members. The finance ministry refused to give up the demand for a MAT despite a number of arguments put forward by the commerce department against it," an official said. The chairman of the EGoM on SEZs, external affairs minister Pranab Mukherjee, decided to defer the matter and take it up in the next meeting.
While a date for the next EGoM has not been fixed, sources said it could be held later this month.
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